SINGAPORE: Singapore’s remaining 6,500 colonial-era shophouses are becoming prime targets for ultra-wealthy investors looking to diversify their portfolios and secure a slice of the country’s architec
tural heritage. Despite a recent slowdown in transactions, these properties are now more coveted than ever, with buyers seeking both the prestige and long-term investment potential they offer.
Recent data from Knight Frank shows that shophouse sales dropped in the first half of 2024, with 40 units sold for a total of $354 million, down from 79 units worth $728.9 million in the same period a year earlier. Shophouses are subject to stringent conservation guidelines, with authorities conducting inspections every five years to ensure proper maintenance. Any alterations to the buildings must be approved by the state, maintaining the architectural integrity of these heritage sites.
John Bin, Director of Capital Markets and Investment Services at Colliers, explained that investing in shophouses often involves significant upfront costs and can be low-yielding in the initial years. “In terms of cash flow, it may not be that attractive, but it’s more for capital preservation and increased value down the line,” he told SBR.
Interest in shophouses has faced recent headwinds, particularly in Q4 2023, when sales dropped to their lowest level in 13 years following a $3 billion money laundering investigation linked to a dozen properties. Authorities arrested and charged at least 10 suspects, with some shophouses used as collateral for illegal loans. This incident, coupled with stricter bank lending practices, created a temporary market chill.
Traditionally, shophouse investors have focused on prime districts like Chinatown, Boat Quay, and Havelock Road. But recent trends show growing interest in non-core areas such as Bugis and Districts 8, 12, and 14, covering Little India, Balestier, and Geylang, respectively. These districts, once considered less desirable, are now seen as emerging hotspots following government measures to clean up red-light districts and impose alcohol restrictions.
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